Khosla Ventures: The US is Massively Underfunding the Innovations Critical to Its Energy Future

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Chris,
First, thank you for raising the level of discourse and bringing in interesting guests.  I second the appreciation for your rigorous requirement for all energy inputs to be accounted for before we accept a favorable EROI on alt energy.

Respectfully, I had a couple of issues with one topic discussed by Andrew Chung.  He (and  you?) seemed to very intent on pushing the involvement of government to invest to make alternative energy feasible.  It seemed that Andrew was pushing involvement at the POC/ commercialization stage.  Without an axe to grind I point out that Khosla has an understandable self interest in obtaining government subsidies in that it a) makes it more likely Khosla’s investments will succeed and pay back to Khosla, and b) decreases the amount capital Khosla invests or has to raise from private investors.  I simply don’t believe that companies (flush with cash it seems) can’t fund this.  Either singly or as a private consortium.

In truth I am reflexively skeptical of government, but acknowledge there is a ‘role’ for government in alternative energy.  Can we not agree that at a minimum Solyndra had the appearance of corruption, perhaps in reality a payback for Obama fundraisers?  Republicans would be equally tempted by this process.  Can we not acknowledge that even a well-intentioned government is inefficient in that it has a high administrative overhead of collecting taxes, creating laws and committees to oversee investments, potential earmarks and constituent paybacks and then actually going through government hurdles to identify, review, develop applications for, etc, etc, etc.?

With that in mind, it seems to me that the best role of government is to support basic research, not applied research.  We also need a process whereby breakthroughs in basic research are made rapidly and freely available (non-exclusive licenses?) to any willing private U.S. companies to commercialize.  I appreciate from the interview that even applied research has a long time horizon.  However, again, applied is the domain of the private company.

With that premise, what would be interesting (interview suggestion warning!) is a guest(s) to propose the Top 5 basic science questions/ hurdles regarding alternative energy.  That would be something the government could make a contribution to and build a national energy policy around.  Something like a national lab or specialized center for each question.  America has had success with this approach- think atomic bomb (Manhatten Project), moon shots etc.  These things work because they are single-minded and goal oriented (not general ‘alternative energy efforts’). For example, I’m not an expert but understand that solar energy is hampered by low efficiency of capture i.e. 8-10% of solar energy.  Why not make a 50% energy capture rate as a goal (laboratory scale)?  Ditto a dense, lightweight electricity storage technology (my computer barely runs for an hour and half unplugged).  Nuclear reactor on a household scale?  Surely we can at least agree on 5 key projects, however daunting they may be?

Take care,

Hrunner

 

 

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Bring on high oil prices, because it inspires innovation:
Liquid Metal Grid Storage in the works:

http://www.youtube.com/watch?v=Sddb0Khx0yA

 

Solar Thermal Stirling PowerDish:

http://www.youtube.com/watch?v=rPc0GIQ8djI

9 MW/year <$20K…No high temperature voltage drawdown…Before you call…they don’t sell to home owners, yet.

 

Natural Gas Transition Plan:

http://www.youtube.com/watch?v=aIFFFGf1ZRE

Got Whale Oil?

23

This article was posted to Zero Hedge on 4 April. In an exquisite twist of irony, which only the apocrophal Tyler Durden is capable of, another article was posted on the same page: this one about Dr Kari Norgaard, the Oregon University Professor who claims that Global Warming sceptics suffer an illness.http://www.zerohedge.com/news/guest-post-face-authoritarian-environmentalism. This article seems to suggest that the running down of much of our energy infrastructure is no accident.  

Norgaard last week attended the annual four-day ‘Planet Under Pressure’ international conference in London, where she presented her controversial paper to delegates on Wednesday.

The scientists behind the event recently put out a statement calling for humans to be packed into denser cities so that the rest of the planet can be surrendered to mother nature.

And fellow attendee Yale University professor Karen Seto told MSNBC: ‘We certainly don’t want them (humans) strolling about the entire countryside. We want them to save land for nature by living closely [together].’

Ageda 21 is not a myth or a conspiracy, its a plan. Dr Norgaard is right on message with it. Expect to mear much more from the Dr Norgaards of the world but don't expect any significant investment, public or private, in expansion of the energy grid. We're set for a low carbon future.

Maxwellbach.

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[quote=maxwellbach]This article was posted to Zero Hedge on 4 April. In an exquisite twist of irony, which only the apocrophal Tyler Durden is capable of, another article was posted on the same page: this one about Dr Kari Norgaard, the Oregon University Professor who claims that Global Warming sceptics suffer an illness.http://www.zerohedge.com/news/guest-post-face-authoritarian-environmentalism. This article seems to suggest that the running down of much of our energy infrastructure is no accident.  

Norgaard last week attended the annual four-day ‘Planet Under Pressure’ international conference in London, where she presented her controversial paper to delegates on Wednesday. The scientists behind the event recently put out a statement calling for humans to be packed into denser cities so that the rest of the planet can be surrendered to mother nature. And fellow attendee Yale University professor Karen Seto told MSNBC: ‘We certainly don’t want them (humans) strolling about the entire countryside. We want them to save land for nature by living closely [together].’
Ageda 21 is not a myth or a conspiracy, its a plan. Dr Norgaard is right on message with it. Expect to mear much more from the Dr Norgaards of the world but don't expect any significant investment, public or private, in expansion of the energy grid. We're set for a low carbon future. Maxwellbach. [/quote] I just wrote Karen Seto.  Here's what I said: Dr. Seto: I had seen this quote attributed to you and just wanted to check the accuracy of the source. ‘We certainly don’t want them (humans) strolling about the entire countryside. We want them to save land for nature by living closely [together].’ Thank you. Sincerely, ao   Here was her reply: ao, You are the 40th person to inquire about this. First, I do not know the source of this quote, but I was not an attendee at the meeting, and therefore the source of the information should be questioned. Second, the comment below is taken out of context and is misquoted. I had said that in the context of the world adding another ~3 billion people by the end of this century, urbanization offers multiple environmental benefits, including the opportunity to live more densely to save resources. My best wishes, Karen
25

I watched your videos you left for us, and I have seen hundreds just like it for some years now, and they represented as Gregor was conveying in his essay. That being the market will move on to the next cheapest BTU.
So lets asses the situation post 2008, where are we? How has the narrative changed? Can we purchase a Natural Gas car? Has anything been scaled to handle either the purchase or conversion of 250 million cars or light trucks using electric or natural gas? Are they affordable will our cars warrantee be valid?, and where can we convert? Is the cost reasonabe to convert if scaled up? The answer isn’t just NO or Hell NO,  the answer is we haven’t even started. Truth is we are behind this issue, and the time gap is widening especially without a PLAN.

Now, what have we done? Talk, lots, and lots of talk, and zero actions. Everyone is looking for leadership, where is it? If starting a war with Iran is leadership then…? You watch, I’ll be so surprised if the rhetoric during the start of negotiations with Iran on April 14Th doesn’t begin with allot of fluff (like Obama started recently) isn’t toned down quite a bit when they start because Obama needs cheep oil, and the market will certainly take oil down if the message coming out of these meetings hint of anything positive, So, I look for the rhetoric to be soothing as negotiations proceed. It is estimated by some that a $25 dollar per barrel premium is applied to OIL because of the Iranian issue. That’s allot of discretionary spending folks. In addition, I DO NOT believe we do anything with Iran this year, an election year, if anyone up for re-election has anything to say about it. I would be shocked! So rhetoric that is positive makes the most sense. 

This same leadership of the last 4 years (both sides of the aisle) will be displayed again come September when the Treasury will have to raid some government pension plan somewhere just to pay the bills. Yikes!!! The savings that Boone Pickens is talking about is right now, helping the economy right now. The Congress is going to come up with a plan for our economy that is so back loaded to balancing our budget, and if it works, is followed through by our leadership well into the future (it won’t) then great. I know this though, using natural gas, our natural gas is tangible, we can see it, measure it, will work for our economy immediately, and is a sure bet, and will bring jobs, yet nothing, inaction is the standard fare. Unbelievable! 

What is so incredible is that the savings from imported oil to a cleaner fuel, that can be scaled up, used for heavy lifting, and create hundreds of thousands of jobs is left in the ground because our Congressmen are either incredibly stupid or are owned by some special interest group that won’t allow them to represent the people, and our interests. Crazy stupid, just crazy.

As an environmentalist myself (more than passive anyways) with common sense, I say 30% less carbon emissions is a carbon tax of 30% that cost me nothing, you nothing. Additionally, natural gas would be cheaper to fill my tank up with, that means less demand on oil, and would then add to supply, and oil barrel price would have to come down. Add to that the cost to our military to protect the free flow of oil, and it makes one helluva common sense arguement. Again, thank you for the videos.

BOB

26

Though I don’t find much fault with your argument above, Bob, I’m drawn to the old saw- "you can’t solve a problem with the thinking that got you into that problem"- or something such.  "Filling your tank" is only a small portion of our problem- the development costs both resource-wise and $$-wise is probably more than can be handled in this current global market.  Mfg. costs, maintenance costs, infrastructure development and maintenance costs, consumables (tires, brakes, lubes…) for a new fleet of vehicles would be a tremendous challenge.  I think the days of one person-one vehicle are numbered.  Remember that recent article someplace about more young people eschewing new cars?  Maybe change is coming-from the only place that matters, the people, not the gov’t.  Aloha, Steve.

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[quote=robert essian]An aside: Has anyone continued their studies on Fukishima? I am just amazed from a numbers or statistical point of view at the calamity known as housing unit number 4. The opinions coming from the risks of that building and a nightmare earthquake of a 7 would do is tragic, and humanities near term problem. That building falls, and it appears that Peak Oil may be the least of our problems. Chris, you spent some time on this, are more qualified the most of us, and IMHO you need to do a follow up. Politely of course.
http://www.zerohedge.com/contributed/2012-14-07/largest-short-term-threat-humanity-fuel-pools-fukushima
BOB
[/quote]
Bob,
The Zerohedge post you link to describes some real risks.  However, even if both the unit 4 spent fuel pool and the common spent fuel pool explode, and 85 times more Cs-137 are released into the air than from Chernobyl, I doubt it will precipitate the end of civilization.  Chernobyl contaminated about 10,000-20,000 square miles of land, probably 1,000-4,000 sq. miles enough to require it to be abandoned for a long time.  For perspective, the earth has about 200 million square miles of surface, about 60 million of that land.  Chernobyl probably also caused or will cause a million or so cancers and birth defects.  Multiply this by 85 and you have a terrible disaster, but nowhere near the end of civilization - unless there are bigger risks from other isotopes that would be released.  Now the actual end of civilization and possible explosions at hundreds of untended nuclear facilities - that would be real bad.
Steve

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[quote=robert essian]An aside: Has anyone continued their studies on Fukishima? I am just amazed from a numbers or statistical point of view at the calamity known as housing unit number 4. The opinions coming from the risks of that building and a nightmare earthquake of a 7 would do is tragic, and humanities near term problem. That building falls, and it appears that Peak Oil may be the least of our problems. Chris, you spent some time on this, are more qualified the most of us, and IMHO you need to do a follow up. Politely of course.
http://www.zerohedge.com/contributed/2012-14-07/largest-short-term-threat-humanity-fuel-pools-fukushima
 
BOB
[/quote]
Bob -
The ZH article is alarmist, analytically and scientifically unsound, technically inaccurate,  and basically a piece of garbage.  Any article that continues to cite Arnie Gunderson as an "expert" spills credibility faster than a dress hits the floor on prom night.  There will be no explosions, the decay heat rates are extremely low.  Even if the building were to collapse and somehow scatter fuel cells all over Japan, they most certainly are not going to explode, much less spontaneously arrange themselves in geometries that will support sustained fission on any scale.  Fukushima is now and will continue to be a localized event.
https://peakprosperity.com/comment/133487#comment-133487
The largest short term threat to humanity is articles like this - and anyone allergic to hyperbole.
Politely of course…

29

thatchmo, honestly, I am not married to any idea, I truly am not. I would prefer an all electric, and clean fuel economy, and is why I strongly agree with a poster here who suggested that the best minds get together, and look at our energy problem, factoring all issues including our decaying or rusting (antiquated) system, and form a plan. Thatchmo, we will have to have energy on demand, and what exist right now can scale up using what we have in the ground, use a surcharge then to all consumers bills to pay for the transition.

30

Steve, I never suggested an "end of civilization" scenario. I did suggest by posting that particular article from ZH that we should look at the issue once again. Unit 4 topples, and grabs from Unit 3, 2,1 the cooling rods as the article reads, and what is most likely to happen within a few hours, and its possible effects on the world around us looks really, really serious. I am not an expert at all but Arnie G. seems quite concerned so I hug my Lady just a little firmer, and tell everyone else how much I love them. That’s about all I’m qualified to do at this time. Be good Steve. Go Tigers-Red Wings BOB

31

I’m sorry Bob that I didn’t make it clear that I was calling attention to the ZH post and it’s alarmist nature (apparently even more alarmist based on Dogs’ expert analysis).  I wasn’t implying that you believed it.Steve

32

Thanks Steve, and Dog I don’t know sh*t for a fact but from the article it wasn’t a stretch for me to conclude that the island of Japan would appear to be in grave danger. It is why I asked Chris if he would re-address this issue because Chris basically set the table for me (perhaps others) when the incident first happened. The picture appeared dire then, and after all that has occured since, and at present I would think a redress would be appropriate. Again, I have no clue but Arnie G. has some serious credentials, and are referenced often so if I cannot rely on his expertise then direct me to someone who can so I can get the real skinny. If my memory serves me correctly it was Chris who brought Arnies name into my home so I trust Arnie G. is the Man. 125 (plus) million people live in Japan, and the big "IF" is deserving of a quiet moment of reflection for their safety in my opinion. Regards
BOB

 

PS: Adam and Chris, thank you for representing on Mish’s unfortunate situation for all of us. Your actions showed compassion and class to our friend.  I have sent my check. BOB 

33

Mark_BC,
I bought a used Prius in 2003 for essentially the same reason. My wife drove it for years and was totally convinced that the operating cost consisted only of fuel expenses. She didn’t consider the capital costs, maintenance, insurance, or the fact that it had limited utility. As a result, she made uneconomical decisions when it came to driving. As an example, she turned down employment (at a slightly lower wage) in the exurb we relocated to drive 35 miles each way to her existing secretarial job.
If everyone in your area followed your example, highway funding would diminish and/or new sources (taxes) would need to be levied to replace the funding. Since you are a pioneer, you enjoy a subsidy that is paid by your fellow countrymen. Does that seem fair to you?

[quote=Mark_BC]
We don’t really need disruptive technology IMO, we already have most of our "solutions", it’s just a matter of changing mindsets and behavior. There’s no fundamental reason why every household could not have $10,000 of solar panels on their roof, an EV, a wood stove, and a heat pump. Bam, right there, problem basically solved. The problem of course, is time. I think the only disruptive technologies that would be helpful on a massive scale would be some artificial photosynthesis, and as mentioned in the article, when solar panels and LED light bulbs become cheaper than the alternatives on a direct purchase price basis.[/quote]
Will this work for people living in apartments? Time isn’t the only problem. The big problem is that we live on a finite planet, yet we have infinite appetites. Many people live one paycheck from bankruptcy. Even if they could get a banker to loan them the funds to purchase these items, they would have to change spending habits to afford it. In general, people are more worried about today than tomorrow.

[quote=Mark_BC]
That’s why I don’t buy into these arguments that because we don’t have a workable plan for how alternatives are going to be able to scale up in time to meet the oil crunch, that we shouldn’t move forward. I can’t help but ask in response, "Well what else are we going to do???" Every year we waste humming and hawing about not having a perfectly laid out EROEI schedule for alternatives (as if we had one for fossil fuels), burns more precious fossil fuels that could otherwise be put to use building EV’s so that people would still have the ability to haul bushels of corn to market when the US is forced to operate on 1/10th the oil it currently does.[/quote]
EV cars, solar panels, wood stoves, and heat pumps all consume fossil fuels during their manufacture, transportation, installation, and use. (Solar panels may not need fossil fuels while in use.) Do you only use electricity when the sun is shining? Do you have an efficient battery backup system that has enough capacity to carry you through the night? My guess is that you still rely on the electrical grid to provide some energy. Again, if everyone followed your example, the price of electricity would skyrocket to cover the fixed costs to build and maintain the system.
You ask "Well what else are we going to do???" I don’t have an answer that is palatable.

I’ve seen estimates of the Alberta oil sands EROEI from 3:1 to much higher. It all depends what gets included in the calculations. Speaking of which, you need to reevaluate your 200:1 calculation. Your 5:1 figure probably already includes the energy cost of natural gas. Then, you need to address the environmental issues surrounding the sites and the enormous amount of clean water needed to produce a barrel of synoil.
When I read your post, it reminded me of an excellent article I read on Financial Sense written by Gail Tverberg. http://www.financialsense.com/contributors/gail-tverberg/2012/01/04/obstacles-facing-us-wind-energy. I discussed this article with an engineer friend who works for Bonneville Power Administration (BPA), a quasi-governmental organization that maintains hydroelectric (along with other sources of) power along with transmission lines. He said that BPA has to buy all the energy provided by the numerous wind farms in the Columbia Basin (at premium prices.) Now that there are so many turbines spread out over a large area, they can utilize a higher percentage of the power generated; however, they have gas and coal fired plants that they use to match demand. These other plants take time to gear up and gear down. They cannot power up instantaneously to meet a drop in supply or a spike in demand. BPA cannot afford the political nightmare of recurring brown-outs so they produce more than their models indicate and let the grid dissipate the excess.
He agreed with each of Gail’s points. I asked him "if a wind turbine’s energy were completely dedicated to producing (mining, processing, transport, installation, etc.) other wind turbines, how many could be produced before the turbine was worn out. His answer: Less than one. He said that the enormous torque produced by the spinning blades destroys the bearings and transmissions in as little as 2 years. In his opinion, the owners are gaming the system and living off subsidies. If the subsidies end, we’ll have thousands of these monstrosities that will fall into disrepair.
It is for these reasons that we need to evaluate the long term costs associated with alternate energy sources. Going ahead blindly just so "we can do something" can produce long term consequences that are contrary to our long term needs.
Grover

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A lot is being done and has been being done for decades. For example:

Sandia National Labs Energy Research

I have invested in multiple alternative energy companies, including some that Andrew Chung mentioned.  There are a lot of people aware of the energy problems we face and are plowing money into potential sources.  I would invest even more but the governments keep absconding with capital that I could use for such endeavors!  You know to do things like build more roads, sports stadiums and prop up the housing market…

I strongly disagree that government should be involved, simply from the standpoint that central planning doesn’t work.  We need many many people studying the problems, looking into many alternatives and when governments become involved they pick winners and losers - and generally not on merit or feasibility but political connections.  How many small companies could have been funded with the $500M loan made to Solyndra?. How much bureaucratic overhead was involved above that $500M?

How many companies were denied capital because the government decided corn based ethanol was the solution?  How many other technologies died because government decided to heavily subsidize PV and wind?  The problem is that technological development has to compete for resources and when a government favors one solution over others it may be killing off good viable alternatives.

You can also just look at the track record of governments.  Corn based ethanol, housing subsidies, oil subsidies, China and their over building of consumer manufacturing based on a debt laden consumer.  We can’t even get accurate assesments of the problem, just look at the unrealistic EIA estimates.  Exactly why should we expect government to suddenly get it right?

I agree with Chris that none of the solutions currently on the table are a panacea and may not even be large scale feasible, but I would prefer we leave money in the hands of millions of investors with a profit motive to fund many different experiments.  I want companies to have to struggle to survive because it means they have incentive to make things work rather than simply pay large tax funded salaries to their executives.

 

 

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I want companies to have to struggle to survive because it means they have incentive to make things work rather than simply pay large tax funded salaries to their executives.
You"ve got it.

No lucrative salaries in that field. No Sir. Only the most altruistic need apply.

36

I have enjoyed everything written here, and it really brings to light the complexity of the problem, and why ramping up the next BTU is going to be time consuming, and frought with problems. That means allot more TIME, and a continued liquid fuels problem.
We need a serious move on a commercial battery storage system that scales. We need a Plan. We really need to get moving on this issue in a serious way.

What’s all this mean then, it means that a gap exist that is growing wider by the day between liquid fuels and more liquid fuels. Even if we had every new gadget installed, the grid was superbly engineered and cost effective, we still need to get 250 million internal combustion engines off the road in the United States alone. That in and of itself will take a long time to accomplish (10? 15 years?), just to make a dent if employment/jobs are at 5% full time employment rate. That means employing millions of folks that will only add to oil demand sending the price much higher, and causing our economy to fail as we try building everything out.

Some here have asked that the government not be involved, and I agree. However, to move power over State lines will require emminent domain being declared so that the process isn’t bogged down, and make the project way more expensive than necessary. In addition there will be the NIMBY crowd, and they MUST be contained, and made irrelevent as it is cheaper to go from point A to point B in as straight a line as possible (remember, I said perfectly engineered, I don’t want the wire stretched across Yellowstone or the Grand Canton). An easy solution for this crowd is just turn their power off, that should do it (yes, I am trying to use humor at times to lesson my pessimism that creeps into my thoughts from time to time). Good Luck

A personal note: I would not know who to turn to, to discuss any of what I am researching and reading if not for the intelligence on this site. I do believe I would not be near as happy as I am today. What is discussed on this site is of a great relief for me personal, and intellectually. Thank you…Go Tigers-Go Wings

BOB 

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Emminent domain is almost never needed.  Eminiment domain is used for goverments to take from a private individual and give to another at a lower than market cost.  If someone wants to string a power line from one area to the next they can pay for the land to do so.  The zig-zagging referred to in the podcast is generally not due to private land holders, as they will generally accept some amount of money to allow the line, it’s governments and environmental groups protesting crossing of public lands…

As in the podcast, the solution is probably not long runs of power lines but local solutions and highly distributed generation.  In the cases where long power line runs are needed, those that benefit and choose to live where energy resources are scarce should pay the cost of purchasing the land needed.   Perhaps those of us in sunny fly-over states will trade our abundant solar energy resources to those in the rainy places for food. :-)  It’s always a trade-off on where to live and what natural resources are available in the area.

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rhare, I am long winded enough so I generalize sometimes, and leave it to you folks to understand I reference the experts, and in this case the engineers.While crossing State lines or even within State borders it is necessary that through every county you would need a site plan, inspections, permits, so forth and so on. It is my understanding, and certainly I could be wrong but the power of the Executive Branch to override that of the States or County for the common good of all is of particular good use when a project this size is warranted. If it is necessary to take someones home that would be unfortunate, especially if it has been a family home for a century. However, our banks have many very nice ones in their shadow inventory that I think most displaced homeowners that would be uprooted wouldn’t mind moving into. Just a guess because I have no clue how any one individual would react. My guess is that if the narrative changed in this country to one of a common goal, and was delivered in the spirit of our country as one big community working for the common good. I believe then that most everyone would be applauded their being inconvenienced for their country. Besides, we own the homes anyways, we bailed the banks out. So pick out the nicest one, on the tax payer, and make sure the title isn’t bogus, and all the paper work is legal, no robo-signers, etc, and have a nice day. Regards BOB

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No it is not for the excutive branch.  In fact the federal government should not be involved in any way.

It is THEFT!  Anytime you take something from someone involuntarily it is STEALING!  It doesn’t matter if it’s by proxy.  People find it so easy to steal from others when you don’t have to pull the trigger yourself.  There has been an awful lot of evil done in this world in the name of the greater good.

  • Bailing out the banks, that's for the greater good.
  • Internment camps during WWII - oh yeah, that was for their safety and the greater good.
  • Hitler and other despots have used "for the greater good" for a lot of their actions.
At least own up to what you are advocating and don't hide behind the "greater good" rhetoric, if you think theft is fine, then at least admit that is what you are doing.  Just be aware that eventually that "greater good" may require great sacrafice on your behalf, as it won't always be others that have to be "inconvenienced for their country".

Here is one of my favorite articles that relates to this topic: Button Button

 

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rhare, I certainly respect your point of view because I can visualize just such a reaction should this ever be an issue. I know this now though, if rules of law are needed to be retroactively changed tehy will be. Moral hazards have been created wherever it is required. So again, in the interest of costs, and time a straight line is always preferred over a spaghetti like look see while stringing cable. Rhare, good luck to you. Honestly, I just want an energy Plan,… BOB